26 Nov 2014
OPEC output cut to trigger a fresh rally in USD against Asian Currencies– FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, notes that a cut in the OPEC output may trigger a fresh rally in Dollar against Asian Currencies irrespective of the cut being symbolic or aggressive.
Key Quotes
“Most experts believe, modest cuts would do little to prop up the prices. If the member nations come to an agreement, the output cuts is unlikely to be more than a million barrels a day. At that level, the group is unlikely to make any significant difference in a market that produces more than 90 million barrels per day.”
“Moreover, analysts say Crude can fall to USD 60.00/barrel, if the OPEC fails to cut the output. Going by the rift between the member nations, markets are pricing-in a low probability of a significant output reduction tomorrow.”
“In case of a symbolic rate cut, Crude prices are likely to post modest gains since the commodity is oversold. Moreover, a symbolic rate cut would trigger speculation that the OPEC group may implement more cuts if prices continue to slide. Thus, prices may either rise or stabilize at the current levels in the short-term.”
“OPEC announces an aggressive output cut – A very clear scenario for a fresh rally in the US dollar across the board as markets would consider Crude prices to have bottomed out at the current levels.”
“In both the cases, the Asian emerging market currencies are likely to take a hit against the US dollar.”
Key Quotes
“Most experts believe, modest cuts would do little to prop up the prices. If the member nations come to an agreement, the output cuts is unlikely to be more than a million barrels a day. At that level, the group is unlikely to make any significant difference in a market that produces more than 90 million barrels per day.”
“Moreover, analysts say Crude can fall to USD 60.00/barrel, if the OPEC fails to cut the output. Going by the rift between the member nations, markets are pricing-in a low probability of a significant output reduction tomorrow.”
“In case of a symbolic rate cut, Crude prices are likely to post modest gains since the commodity is oversold. Moreover, a symbolic rate cut would trigger speculation that the OPEC group may implement more cuts if prices continue to slide. Thus, prices may either rise or stabilize at the current levels in the short-term.”
“OPEC announces an aggressive output cut – A very clear scenario for a fresh rally in the US dollar across the board as markets would consider Crude prices to have bottomed out at the current levels.”
“In both the cases, the Asian emerging market currencies are likely to take a hit against the US dollar.”